Kadoink, a text messaging marketing startup based in San Francisco, has been seized by creditor Hercules Technology Growth Capital after failing to maintain the financial requirements of a $2.5 million line of credit. CEO Scott Cahill says that there is still a “substantial amount of cash remaining” that is being returned to Hercules, and that they are looking for a strategic buyer to keep the service alive.
The company has announced just $5 million in funding from Sutter Hill Ventures, but they may have burned through substantially more than that. There was rumored to be a previous angel round of nearly $2 million, and the founders took $3 million or so off the table in 2008. Sutter Hill may also have bridged the company an additional $2 million Along with the venture debt, the company may have raised as much as $14 million in capital. At this point, all equity holders other than the cashed-out founders are wiped out.
The startup provided text messaging based marketing services on behalf of brands, similar to competitor Mozes. We’ve added it to the deadpool. → Read More
TV advertising startup Spot Runner really is running on fumes. According to a lawsuit filed by one its irate investors, advertising giant WPP, Spot Runner has “expended all but approximately $20 million of its investor capital, while losing money at the rate of $35-$45 million a year.” The company has raised $100 million since 2006, and at one point employed more than 500 people before a string of layoffs cut that number down significantly.
The lawsuit states that the company had a loss of $45 million in fiscal 2008, on revenues of only $9 million. And in fiscal 2007, it lost $35 million on revenues of $5 million.
And here’s the zinger. While Spot Runner was losing all that money, its founders and two early investors (Index Ventures and Battery Ventures) sold shares worth $54 million. CEO and founder Nick Grouf took the lion’s share of those proceeds, netting $26.7 million in five transactions between Feb/March, 2006 and March, 2008. Battery and Index each sold $11.7 million worth of shares (nearly doubling their initial investments of $6 million each). While co-founder David Waxman walked away with only $3.6 million and investor Bob Pittman $365,000 worth of shares. The main complaint of the lawsuit states: → Read More
Yahoo’s closure of their Jumpcut video service feels like the slow peeling off of a bandaid. In December they announced that no new videos could be uploaded, but that they “will be keeping the Jumpcut site up and running for the foreseeable future.”
Apparently the foreseeable future ends in June, when the site will be shut down. From an email they sent out to users today:
Dear Jumpcut user,
After careful consideration, we will be officially closing the Jumpcut.com site on June 15, 2009. This was a difficult decision to make, but it’s part of the ongoing prioritization efforts at Yahoo!
Very soon, we’ll be releasing a software utility that will allow you to download the movies you created on Jumpcut to your computer. We’ll send instructions to this email address when the download utility is available.
Once you download your movies, you may choose to upload them to another site such as Flickr, which now allows video uploads. You can find out more here: http://www.flickr.com/explore/video/
Thanks for your understanding and thanks for being a part of Jumpcut.
The Jumpcut Team
AOL’s Propeller launched in 2006 as a “Digg Killer” – a Digg like site with editorial oversight that had massive netscape.com traffic directed to it. All those Netscape users were used to seeing a standard news page, though, and didn’t quite know what to do at the new site.
A variety of changes were made over time, including paying news submitters to lure them from Digg, changing the name to Propeller.com, and occasional layoffs. They even added a mascot. But nothing has stopped the decline of the site, and now AOL is appealing to previous users to come and give it another try.
A year ago 4.6 million people a month visited the site (Comscore worldwide). Now its 2.1 million, more than a 50% decline in unique visitors. Page views have also dropped by 50%, to just 6 million/month. Revenue is likely in the low hundreds of thousands of dollars per month at best, meaning that it is almost certainly costing AOL money to keep the lights on at the site.
It’s pretty clear that Propeller is a candidate to enter the deadpool, although the upside is the people working on it could go to more interesting projects at AOL. But they’re not giving up just yet. In an email to registered users who haven’t signed in recently (that would be me), Propeller General Manager Tom Drapeau said: → Read More
When SMS reminder service Kwiry launched back in December, 2007, I wondered whether anyone would use it. We now have our answer: not enough people to keep it going. The company sent out a notice today to users, also on its Website, that it will be shutting down on April 23, 2009.
Kwiry allowed you to text a keyword from your phone and get back an email with links to search results for that keyword. It was supposed to be a simple way to remind yourself of things. Later, it expanded to other ways to use SMS, such as to update your Netflix movie lineup. But it didn’t really solve a pressing problem. There are easier ways to remind yourself of something than sending yourself a search results page via clunky SMS. The bigger issue I think was that these reminders were for yourself instead of being aimed at other people. People don’t want to talk to themselves, they want to talk to other people, which is why communication-based services always have an easier time gaining traction. → Read More
In the world of Web video, either you are YouTube or you are in trouble. Today, well-funded video site Veoh laid off 25 people, the company confirmed today. The layoffs were brought on by a restructuring, as the company shifts focus away from its standalone site, says founder and now-reinstated CEO Dmitry Shapiro. Shapiro replaces former CEO Steve Mitgang. With both today’s layoffs and cutbacks last November, the company is now left with 45 employees, says Shapiro. We have added the latest round to our Layoff Tracker.
Shapiro says that the company is doubling down on its video search browser plug-in, Video Compass, in an effort to engage consumers with videos at times when they wouldn’t normally be watching them. Video Compass adds a video recommendations whenever you conduct a search on Google or elsewhere on the Web. Veoh adds over 25,000 new Video Compass users daily. Veoh’s standalone video playing site is having difficulty competing with the bigger players in the game like YouTube and Hulu. Still Shapiro maintains that Veoh’s site remains popular among consumers, generating more than 200 million video streams each month from content publishers such as ABC, CBS, ESPN, Viacom, and Warner Bros. Comscore says Veoh’s site had 15 million unique views worldwide in February 2009, down from 18 million last August, plus another 7.2 million for its VeohTV app, which has also been losing viewers (see chart below). Shapiro says that the site alone reaches over 23 million unique users each month.
So what went wrong? Shapiro says that the video search business model is still immature. → Read More
It is going to take more than just an open search platform to take on Google. Wikia co-founder Jimmy Wales announced today that he is shutting down Wikia Search, the company’s experiment in creating better search results through crowdsourcing. Wikia Search attempted to port the Wikipedia model over to search by allowing anybody to modify results by including new links or moving natural results up the page. The initial launch last year was awful, but the experience improved over time. Still, it never really attracted anything more than a trickle of searchers. We are placing it in the deadpool.
Then Wikia Search got Googled when the search juggernaut launched its own Search Wiki feature, which lets you do pretty much the same thing on Google itself (move results up the page, block results, add comments—except it only affects your search results, not everyone’s). And so it goes. You cannot compete in search if your idea can be easily copied by Google. → Read More
SeeqPod has decided to sell its source code to developers to spawn more clones, one of the media search startups that built upon its API is apparently calling it quits: Streamzy, which we profiled in July 2008, is selling itself on eBay at a starting bid of $1,000, provided it’s not a lame April Fools joke (the bidding ends April 1).
Update: Streamzy co-founder Brian Krantz says it’s definitely not a joke.
The service amassed merely 2,400 registered users since its launch in early 2008, and has a monthly visitor rate of only 7,000. The back-end runs for free on Google App Engine and the Flex front-end code will be included should someone decide to pick up the site. → Read More
Busy day for the deadpool. Earlier today we had to drag a startup out of there, and now three others are tumbling into it (although one might still be saved in time).
Here’s a quick overview:
Popular game-centric file download service FileFront is closing down on March 30.
- Cruxy, a nearly 5-year old provider of marketing, monetization and analytics tools for digital creators ranging from film makers to music artists, is calling it quits too.
- Documentary-film.net, an under-the-radar video documentary hosting service with a small but loyal fan base, is unable to cough up the necessary money for decent hosting infrastructure.
(Read more details after the jump) → Read More
Yahoo is cutting more fat today by closing its travel bargains website FareChase, which it originally acquired back in July 2004 and re-launched two years later. The company will be announcing the shut-down later today, and will start redirecting visitors of the service to its main travel site soon.
The service let customers perform comparative searches for pricing on flights, hotels, cruises and cars, but it was apparently not enough of a strategic product enhancement for Yahoo Travel, hence the company discontinuing it altogether to tighten its focus and cut costs in these difficult times.
Sounds like a plan to me. → Read More
Music startups sure don’t seem to have it easy these days. Lawsuit after lawsuit is raining down on some of them, and legal threats, fierce competition but evidently also the economic downturn and the decline in digital advertising spending is forcing some companies to shut down altogether. The latest company to suffer that fate is venture capital-backed SpiralFrog, which quietly hit the deadpool yesterday after 5 years of existence.
A source told CNET the service went under at about 4 p.m. PDT, and has been down ever since. → Read More
Amazon Web Services is discontinuing the Alexa Site Thumbnail service, which has been providing developers with programmatic access to millions of thumbnail images for the home pages of web sites that were stored in Alexa’s index since July 2006. New subscriptions are no longer being accepted, and existing subscribers will only have operational access until June 12, 2009. The service hits the deadpool.
Alexa Site Thumbnail was a paying service (developers were charged $0.0002 / thumbnail URL returned i.e. $0.20 per 1,000 thumbnail URLs) but in an e-mail sent out to developers Amazon admits that it never really took off and that the company will do the smart thing and focus their resources on more popular services.
Update: commenters are pointing to Girafa and PageGlimpse as alternatives. There’s also Websnapr, bluga webthumb, scURLr, etc. → Read More
I’m deadpooling this .ECO top level domain right now. Not because it’s global warming/eco related, there’s plenty of money being thrown around to support just about every crazy green idea out there. I just don’t think the world needs another top level domain, and certainly not one that is designed for “individuals to express their support for environmental causes, for companies to promote their environmental initiatives, and for environmental organizations to maintain their websites.”
People like .COM domains, or alternatively country level domains. These other ones are little more than traps to force brands to protect their trademarks during expensive pre-sale periods. The company behind the domain gets the most of the money, and ICANN, the quasi-governmental, quasi-mafia organization that oversees this mess gets their cut as well. The more domain names that get registered, the more money ICANN makes, which lets them hire more staff to stick their noses into more things. Meanwhile, they’re making a mess of the Internet.
Al Gore is partnering with the company to help secure ICANN approval and then promote the domain. Which goes without saying. Fred Kreuger, previously the founder of Tagworld (now Social Project), is one of the founders. → Read More
PluggedIn, a startup that launched back in April 2008 as a Hulu for music videos, is closing up shop. The company has run out of money after negotiations for a $2.5 million Series B funding round fell apart at the last minute. Co-founder Brett O’Brien says that PluggedIn is currently seeking buyers for the company’s technology and team for a price of around $3 million (the company’s cost of investment).
PluggedIn differentiated itself from the plethora of other music sites by offering a library of over 11,000 licensed High Definition music videos, presented in a simple and aesthetically pleasing interface that was not unlike Hulu’s. Users could browse through over a million artist profiles (which were dynamically generated from content on sites like Wikipedia), and could use an app built on Adobe’s AIR platform to automatically generate a user profile featuring their favorite artists. The site also offered some basic social functionality, though it sounds like PluggedIn development was cut short before ultimately launching a “distributed social media player” that could be embedded elsewhere but still retain interaction between site members.
Despite its attractive interface and high quality videos, the site never really took off. → Read More
Funny how we receive tips sometimes. Yesterday we covered the latest Startup2Startup meetup, and a certain ChrisATSo33t commented on the story pointing to the latest quarterly report (PDF) of Luxembourg-based VC firm Mangrove Capital Partners in which they state that Paris-based portfolio company Jooce would be “closing its doors” during the month of February.
We’ve now entered the month of March, and the Jooce website is still alive, people can still sign up, and their blog has been silent since October 2008. No notice of shut-down anywhere to be found, and e-mails are not bouncing (we hope they’re still being replied to since we contacted the Jooce team for comment). But since Mangrove was the company’s only investor, having injected seed funding into the startup in 2007, we’re pretty sure we can deadpool the startup.
Update: wow. Jooce got back us with a completely different story. (after the jump) → Read More
(The picture makes sense once you read to the end). A former MeeVee employee emails in to say that he hasn’t received his 2008 tax forms from the company, and that no one will pick up the phone to say when he might receive them. We emailed Brad Greenspan, the CEO of parent company LiveUniverse (MeeVee was acquired in May 2008) for a comment. His response: “LiveUniverse is in business” (not what we asked, but good to know), and “…we haven’t had any meevee employees active in a few months as we consolidate operations of that website with a few others.”
We speculated on the health of the parent company last month after a number of high profile outages and claims by employees and business partners that they were going unpaid, but Greenspan insists LiveUniverse remains a going concern. → Read More
Layoffs in the tech sector are accelerating. It took exactly three weeks for tech layoffs to surge to 300,000, according to our Layoff Tracker. Since late January, when the tracker hit 200,000 layoffs, another 100,000 job eliminations have been announced or completed. In contrast, it took five weeks for layoffs in the tech industry to hit the 200,000 mark, and four months for layoffs to hit 100,000 last December. The total number of layoffs since we began tracking since the financial crisis began in late August is 300,093.
The past few weeks have particularly brutal for the technology space, with substantial layoffs announced by Pioneer (10,000), Cisco (3,000), Panasonic (15,000), NEC (20,000), Electronic Arts (1100) and AOL (700). Even Bloomberg and The Wall Street Journal, who both managed to avoid layoffs in the past few months, were forced to make cuts to their workforces. And Google, who was immune to layoffs until late January, continued giving pink-slips in the past three weeks with the company’s exit from radio. Sadly, a few start-ups weren’t able to weather the storm, with eBaum’s World cutting all of its workforce. → Read More
JuicyCampus, a website that invites students to post anonymous (and often-times libelous) messages about their peers, is headed for the Deadpool. In a blog post on the company’s website, founder Matt Ivester blames the site’s demise on a lack of revenue, despite steady growth:
Unfortunately, even with great traffic and strong user loyalty, a business can’t survive and grow without a steady stream of revenue to support it. In these historically difficult economic times, online ad revenue has plummeted and venture capital funding has dissolved. JuicyCampus’ exponential growth outpaced our ability to muster the resources needed to survive this economic downturn, and as a result, we are closing down the site as of Feb. 5, 2009.
There’s currently a thread on Techmeme based on this blog post from Pingdom about the downtime of most of LiveUniverse’s services for the past couple of days. We’ve been getting tips about this since last Thursday, and tried contacting founder & CEO Brad Greenspan (also the founder of MySpace) for an explanation to no avail.
Pingdom caught the fact that the light has gone out for the websites Revver (which we’ve declared dead or at least struggling for life before), LiveUniverse.com and PageFlakes, but missed other unreachable properties such as Peerflix. The only websites that seem to be holding up for the time being are LiveVideo, Yikers, Glumbert and MeeVee, but I wouldn’t hold my breath for those to stay online for much longer either.
Update: per comment below, PageFlakes is back, may I suggest you back up your data if you’re an active user?
Update 2: Revver’s back too, with a message saying that they’ll be down 5PM PST January 28 but they’ll be back up in the evening. We now know that didn’t happen. → Read More
Some companies go out with a whisper, others with a bang. In the case of online animation community MyToons, we’d call it the latter.
Not only do we know the startup has laid off its entire staff except for the founders (which equals 20 to 27 people depending on who you ask) because the lead investor refused to pony up more cash, but we’re also hearing stories from multiple sources who claim that the company’s management has all but thrown VC money out the windows, leading to the current unfortunate situation.
Among the allegations put forward by former employees who wish to remain anonymous: grave mismanagement, a complete disinterest from the company’s co-founders to turn MyToons into a revenue-generating business along with more serious accusations that the executives have been misrepresenting the company’s financial and operational status to their investors and moreover wasting VC money on personal purchases like trips to Hawaii, fancy dinners with relatives, home electronics for personal use and so on. We realize this could be simply a case of disgruntled ex-employees looking to discredit their former employers, but we currently consider the tips to be as reliable as they are detailed. → Read More
